The dollar strengthened to two-month highs against the euro and yen, after data pointed to an improvement in the U.S. economic outlook, while risk appetite in global stock markets eased off.
U.S. Treasury yields ticked higher after ADP payroll data showed an increase in employment on Wednesday and ISM data showed services industry activity in the United States rose to its highest in nearly two years in January.
Dollar short positions are elevated, meaning that the dollar has room to rise when speculators quit those positions.
-CNBC